We noted in our Tax Bite of 31 October (https://parisitax.co.uk/blog/october-budget-implications-for-business-owners) the key changes to CGT rates announced in the budget the previous day, being:An increase in the main rate of CGT from 20% to 24% for sales on or after 30 October (and a change in the corresponding basic (lower band) rate from 10% to 18%); and Business asset disposal relief...
Read moreWhere business asset disposal relief (BADR) is available and claimed, it reduces the rate of capital gains tax (CGT) on the sale of the asset (e.g. shares), subject to a lifetime limit of £1 million of gains. Based on the rates of CGT currently in force, the rate of CGT drops from 20% to 10%, so the saving is significant. As with all reliefs, a number of conditions have to be satisfied in order...
Read moreThe deadline for employers to report events in relation to employment related shares (and other securities) and share options in respect of tax year 2022/23 is 6 July 2023. Most companies will know that if they operate an HMRC-approved or tax-advantaged share option / incentive scheme such as EMI, CSOP, SIP or SAYE, there is an annual reporting requirement in relation to events happening during...
Read moreTax Bite – Growth Shares Growth shares are a popular form of equity incentive, particularly where enterprise management incentive (EMI) options are unavailable. This might be, for example, because: • The company carries on significant “excluded” or non-trading activities for EMI purposes, so does not meet the trading status requirement; • The incentive is to be in a subsidiary company; • The...
Read moreIt was announced in the Budget on 11 March 2020 that the ER lifetime limit is reduced from £10m to £1m for sales on or after that date. The draft legislation published on Budget day unfortunately goes considerably further, as it also contains two measures described as “anti-forestalling” rules designed to capture ER planning implemented pre-Budget, but which in our view had the potential to...
Read moreThe lifetime limit for capital gains that can be subject to entrepreneurs’ relief (to be re-named business asset disposal relief for tax year 2020/21 onwards) has been reduced from £10m to £1m. A successful ER claim reduces the rate of capital tax on the sale of an asset by 10%, so this curtailment is very significant. This Tax Bite provides some basic tips on maximising ER on share sales. As a...
Read moreWe are getting an increased number of enquiries about EMI options, sometimes linked with a salary sacrifice. Companies are hoping to agree low values with HMRC as a result of the economic uncertainty (we will update you once we have seen how HMRC are responding to these valuation submissions) and we have also seen companies wanting to reduce salaries in return for EMI options – this raises some...
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